Correlation Between Legg Mason and Carillon Reams
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Carillon Reams at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Legg Mason and Carillon Reams into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Bw and Carillon Reams Unconstrained, you can compare the effects of market volatilities on Legg Mason and Carillon Reams and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Legg Mason with a short position of Carillon Reams. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Carillon Reams.
Diversification Opportunities for Legg Mason and Carillon Reams
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legg and Carillon is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Carillon Reams Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carillon Reams Uncon and Legg Mason is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Legg Mason Bw are associated (or correlated) with Carillon Reams. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carillon Reams Uncon has no effect on the direction of Legg Mason i.e., Legg Mason and Carillon Reams go up and down completely randomly.
Pair Corralation between Legg Mason and Carillon Reams
Assuming the 90 days horizon Legg Mason Bw is expected to generate 2.14 times more return on investment than Carillon Reams. However, Legg Mason is 2.14 times more volatile than Carillon Reams Unconstrained. It trades about 0.12 of its potential returns per unit of risk. Carillon Reams Unconstrained is currently generating about 0.07 per unit of risk. If you would invest 1,710 in Legg Mason Bw on September 1, 2024 and sell it today you would earn a total of 632.00 from holding Legg Mason Bw or generate 36.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Legg Mason Bw vs. Carillon Reams Unconstrained
Performance |
| Timeline |
| Legg Mason Bw |
| Carillon Reams Uncon |
Legg Mason and Carillon Reams Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Carillon Reams
The main advantage of trading using opposite Legg Mason and Carillon Reams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Carillon Reams can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Carillon Reams will offset losses from the drop in Carillon Reams' long position.| Legg Mason vs. Icon Financial Fund | Legg Mason vs. Transamerica Financial Life | Legg Mason vs. Royce Global Financial | Legg Mason vs. Vanguard Financials Index |
| Carillon Reams vs. Pace High Yield | Carillon Reams vs. Blackrock High Yield | Carillon Reams vs. Gmo High Yield | Carillon Reams vs. Msift High Yield |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |